Mumbai: Cryptocurrency as an asset class has outperformed others like stocks, bonds and commodities since the rout began on February 20 as punters believe that this could remain untouched by the Coronavirus inflicted pain on economies.

The Supreme Court order that trading in Bitcoins couldn’t be banned has also come in at the right time bringing in more traders leading to higher trading volumes, industry observers said.

“Bitcoin is a non-correlated asset class, this means that geopolitical, economic and pandemic like situations don't impact it directly as it's decentralized in nature,” said Sidharth Sogani, founder and CEO of Crebaco. “Bitcoin and the companies dealing in Blockchain and cryptocurrencies are not directly impacted by the lockdown. We are working at 100% capacity and all our employees are working great from home.”

In the week of February 20 which witnessed a global rout, India’s Sensex saw the maximum drop of nearly 36% but recovered only 3.5%. During the same period the S&P fell over 34% but recovered 7.5%, while the French CAC 40 and the German DAX fell nearly 38% but only recovered roughly 10% of that fall. The Brent crude too cracked nearly 57% only recovered 4%.

But, Bitcoin which witnessed a sharp fall of nearly 57% recovered almost 27% of that fall. Bitcoin is currently the best performing asset class in the last one year, with S&P down 14%, Dow jones down 21% and Gold down 21%, during the same 12-month period, data provided by Crebaco Global Inc - a research provider on blockchain and cryptocurrency, showed.

Investors are looking for assets that could withstand the slowdown triggered by lockdown imposed by governments. While some look at the safety of government bonds, others are taking recourse to gold. Some investors in India have found Bitcoin attractive too. The Supreme Court ruling that the central bank can’t halt trading in it is also helping the cryptocurrency.

Latest analysis made by financial comparison portal
Finder.com also suggests that Bitcoins will thrive in 2020 and is predicted to reach highs of $15,499 by the year end, from $7266 on Wednesday.

“Aside from Gold, the list of alternative assets to consider as a hedge against uncertainty in the global markets are far and few between,” said Fred Schebesta, co-founder, Finder. ”To me, Bitcoin remains one of the most attractive assets to help diversify a portfolio looking to hedge risk in the coming years.”

With businesses like banking, aviation, hotels and tourism bracing themselves for a long term impact of the nationwide lockdown announced by Prime Minister Narendra Modi on March 24, cryptocurrencies which restarted operations after getting the go ahead from the apex court have seen an increase in volumes.

“We have seen a jump in volumes on our exchange but that is mainly coming from existing customers and not the new registration,” said Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global, a cryptocurrency exchange. “As of now smaller banks and digital wallets are providing services for trading but we see that the new consumers would start investing heavily once the RBI comes out with a directive and major banks also allow these trades."